sudhir007
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NEW DELHI --- As the financial year nears its end, the ministry of defence (MoD) is rushing through several big-ticket purchases in the hope of using up the budget allocation for 2009-10. The “year-end” contracts run into at least a few billion dollars.
A host of defence deals have been signed in the past few weeks, while some deals are being negotiated for a final settlement. The aim is to sign maximum contracts by March 31.
Last weekend, the army entered its biggest defence contract in recent memory for acquiring two BrahMos cruise missile regiments at over Rs8,000 crore. An army source said the deal was stuck for months “but the financial yearend helped us out”.
A government source said they were also hoping to sign contracts for the upgrade of Mirage 2000 fighters at $2.2 billion and for purchase of Akash missiles for the air force at about Rs4,500 crore.
The government is trying to close these contracts in the next few days, so that the first payment could be released from the 2009-10 allocation.
MoD has been facing flak for its inability to spend capital allocations. It has been returning thousands of crores to the government each fiscal because of delay in concluding contracts, adversely affecting defence modernisation. For example, according to the revised budget estimates in this year’s budget presented last month, MoD was yet to spend Rs5,439 crore meant for purchases by January-end.
A ministry source said March had been “quite” productive, thanks to two high-profile contracts concluded during Russian prime minister Vladimir Putin’s visit and the approval for purchase of VVIP choppers.
When Putin was in New Delhi, the two sides agreed to a hiked price to refit aircraft carrier Admiral Gorshkov and purchase MIG-29K fighters for the navy, together for almost $4 billion. The VVIP chopper deal worth Rs3,726 crore was signed a few days ago after the cabinet committee’s approval.
Sources said the long-drawn contentious negotiations for the upgrade of Mirage 2000 fighters of the air force had been almost closed. The upgrade cost is $2.2 billion and at least one official said the contract may be signed in the next couple of weeks.
Several smaller contracts have been also signed in the past few days. Among them are the over $100-million repeat order for 400 Barak missiles for the navy and the air force’s $60-million order for Crystal Maze air-to-surface missiles.
A host of defence deals have been signed in the past few weeks, while some deals are being negotiated for a final settlement. The aim is to sign maximum contracts by March 31.
Last weekend, the army entered its biggest defence contract in recent memory for acquiring two BrahMos cruise missile regiments at over Rs8,000 crore. An army source said the deal was stuck for months “but the financial yearend helped us out”.
A government source said they were also hoping to sign contracts for the upgrade of Mirage 2000 fighters at $2.2 billion and for purchase of Akash missiles for the air force at about Rs4,500 crore.
The government is trying to close these contracts in the next few days, so that the first payment could be released from the 2009-10 allocation.
MoD has been facing flak for its inability to spend capital allocations. It has been returning thousands of crores to the government each fiscal because of delay in concluding contracts, adversely affecting defence modernisation. For example, according to the revised budget estimates in this year’s budget presented last month, MoD was yet to spend Rs5,439 crore meant for purchases by January-end.
A ministry source said March had been “quite” productive, thanks to two high-profile contracts concluded during Russian prime minister Vladimir Putin’s visit and the approval for purchase of VVIP choppers.
When Putin was in New Delhi, the two sides agreed to a hiked price to refit aircraft carrier Admiral Gorshkov and purchase MIG-29K fighters for the navy, together for almost $4 billion. The VVIP chopper deal worth Rs3,726 crore was signed a few days ago after the cabinet committee’s approval.
Sources said the long-drawn contentious negotiations for the upgrade of Mirage 2000 fighters of the air force had been almost closed. The upgrade cost is $2.2 billion and at least one official said the contract may be signed in the next couple of weeks.
Several smaller contracts have been also signed in the past few days. Among them are the over $100-million repeat order for 400 Barak missiles for the navy and the air force’s $60-million order for Crystal Maze air-to-surface missiles.
